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Dec 12, 2014

Developing Your Credit History

Developing a healthy credit history is important for many
reasons. A poor or non-existent credit history can hinder your ability to
qualify for a loan, pay lower insurance rates and even get some jobs! Starting with your first credit card
everything you do that involves credit is part of your personal credit history.
To have a beneficial credit history, you have to use credit correctly. But exactly
what is “correct?” Here’s a guide …

Starting Out

If you’re just starting out, begin with one credit card and don't open up too many cards within the
first few years. The more credit you have, the more you may end up using and
the more payments you’ll have to make. What’s more, too many inquiries into your
credit and/or new credit cards can have a negative impact.

Credit
Report

The major credit bureaus keep files on your financial
activities that impact your credit. You are entitled to one free credit report
within each 12-month period from each of the three major credit bureaus. The
bureaus run AnnualCreditReport.com where you can get your free
credit report. Your credit score is available for an extra $10 fee—see below. (Note:
If you dispute something on your report you can request an investigation and/or
ask that a note be included in your file.)

Your
Credit Score

As part of your credit report, your credit history is
“graded” and this becomes your credit score. Maintaining a good credit score is
a key factor in your ability to qualify for loans. How is your credit score determined?
There are several factors:

Amount
of open credit you have available

Types
of credit you have

Timeliness
of your payments

Each credit-reporting agency has a slightly different version
of your credit score, but these ranges will generally apply:

Bank of Luxemburg is:Local – Local management and local decision making.Loyal – We are loyal to our customers and the communities we serve.Lasting – Bank of Luxemburg has lasted through all the economic cycles since 1903 and is committed to moving forward as a safe and sound independent community bank.